Extracted Carbon

Canada helped usher in the Paris Agreement on climate change, but wants to continue reaping the economic benefits of being a fossil fuel exporter.

A major shortcoming of the Paris Agreement is that countries have committed to reducing emissions within their boundaries, but not the carbon that is extracted at home and burned elsewhere. So if Canada expands fossil fuel exports, only the emissions from extraction and processing prior to export are counted in our greenhouse gas (GHG) inventory, not the much larger emissions when the fuel is combusted in the US or Asia.

This study re-examines Canada’s contribution to global climate change in light of the Paris Agreement by looking at extracted carbon — the total amount of fossil fuels removed from Canadian soil that ends up in the atmosphere — whether used for domestic purposes, or exported and combusted elsewhere.

We find that:

In 2015, Canada’s extracted carbon equaled almost 1.2 billion tonnes of CO2 that ultimately ended up in the atmosphere.

Canada’s extracted carbon emissions have increased 26 per cent since 2000. This increase is almost exclusively because of Canada’s growing exports of fossil fuels, and in particular crude oil.

Just over-half of the carbon extracted in Canada is used for domestic purposes, and the remainder is exported.

In 2014, the total amount of emissions from Canada’s exports of fossil fuels (738 Mt) was about the same as all GHG emissions that occur in Canada (732 Mt).

Living within a carbon budget

Signatories to the Paris Agreement committed to “holding the increase in the global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above preindustrial levels” (Article 2).

This limit on future global emissions is called a carbon budget. This report investigates Canada’s plausible share of a global carbon budget, and finds that in all cases it is much smaller than Canada’s proven reserves of fossil fuels.

Based on Canada’s share of global fossil fuel reserves, the resulting carbon budget implies that Canada could extract carbon at current levels for at most between 11 and 24 years (the smaller the carbon budget, the less the damages from climate change). This means a planned, gradual wind-down of these industries needs to begin immediately, rather than the continued pursuit of new fossil fuel infrastructure. Pipelines and new facilities for liquefied natural gas (LNG) will lock Canada in to a high-emissions trajectory for several decades to come.

Addressing climate change

Neither industry nor government appear to be considering the Paris Agreement in their future planning exercises. In spite of the Agreement, the National Energy Board continues to forecast increases in Canadian fossil fuel production and exports.

Ultimately, government efforts to address climate change must take into account supply-side measures to complement demand-side policies to reduce emissions. These include:

Stop approving new fossil fuel infrastructure;

Place a moratorium on issuing new leases for fossil fuel exploration and drilling;

Increase royalties; and

Eliminate fossil fuel subsidies.

Canada’s exports of fossil fuels do not need to drop to zero immediately, but we cannot pursue policies that further increase extracted carbon. Currently, countries like Canada only have an incentive to get fossil fuels to market as quickly as possible before more stringent policies come into effect.

If all countries were to act like Canada and seek to continue expanding extraction and export of fossil fuels, we are collectively giving up on a limiting warming to 1.5 to 2°C. This is not the future envisioned in the Paris Agreement.

This report is part of the Corporate Mapping Project, a research and public engagement initiative investigating the power of the fossil fuel industry in Western Canada. The CMP is jointly led by the University of Victoria, the Canadian Centre for Policy Alternatives, and Parkland Institute. This research was supported by the Social Science and Humanities Research Council of Canada (SSHRC).

Marc Lee is a senior economist in the B.C. office of the Canadian Centre for Policy Alternatives (CCPA). From 2009 to 2015, Marc directed the CCPA’s Climate Justice Project, and he is part of the research team for the Corporate Mapping Project. Marc has authored and coauthored numerous publications on climate justice, inequality and public finance, and is a frequent media
commentator on public policy issues.

Parkland Institute is an Alberta-wide, non-partisan research centre situated within the Faculty of Arts at the University of Alberta. Parkland Institute studies economic, social, cultural, and political issues facing Albertans and Canadians, using the perspective of political economy. more »